AOT expects to lose no more than 20% of revenue after canceling inbound duty free.

Airports Chairman of Thailand Public Company Limited or AOT Mr. Keerati Gidmanawat revealed that as a state, the Cabinet (Cabinet) has agreed in principle to consider abolishing duty-free shops (duty free) for inbound travelers and the company is ready to move forward with the government policy. But the Finance Ministry has now confirmed that in respect of AOD, the implementation of the policy will not affect the concession agreement. This is because conditions have been specified in the request to restore the area to public use.

However, it is estimated that there will be no significant impact on revenue due to cancellation of tax exemption at 6 airports under the supervision of AOT. This is because the 10% tax-free portion of the total concession contract is a small amount. AOT receives a customs share worth 15 billion baht in terms of annual revenue. Revenue will decrease by 20% or less than 3,000 million baht as the passenger accommodation area increases. This will have a positive effect on the number of passengers. And the AOT increased to compensate for this lost revenue to generate revenue.

“Tax-free income is not the main income of AOT, as the average annual income is 15 billion baht, which increases according to the number of passengers. The main income is still the outbound passenger service charge (PSC), which averages 730 baht per person, so the target is in the next 5 years or 2029. During the year, AOT expects to have approximately 170 million passengers.Millions of passenger revenue AOT has increased, so the lost tax-free revenue is not significant.

Currently the revenue ratio of the airline business is 55% and the airline business is 45%. Keerati also said that by developing commercial areas around the airport to increase revenue from non-aviation activities. Especially the Suvarnabhumi Airport section. 723 Rai plot ready for development. Several airlines like Thai Airways, ANA Airlines and 600 Rai Airport City Development Area are interested in using the space. Initially signed early next year, revenue is estimated to be recognized in 2026 – 2027, only for the rental portion of 900 million baht per year, excluding the share of revenue recognized after the project opens for service.

At the same time, cancellation of duty free zone including reclaiming duty free zone at Suvarnabhumi Airport. and Phuket Airport, which AOT previously announced will take effect from July 1, 2024, another factor supporting this is AOT's rise to rank Thai airports among the world's top 20 airports within 5 years due to increasing passenger service areas. Build variety of facilities This is another factor in measuring support flight quality during airport use.

On the issue of reclaiming space at Suvarnabhumi Airport and Phuket Airport, Suvarnabhumi Airport announced that it will reclaim 1,000 square meters of total area divided into 12,000 square meters, a proportion of approximately 8% and Phuket Airport. Approximately 2,500 square meters have been reduced since submission of the bid, approximately 400 square meters or a ratio of approximately 17%.

Regarding the impact of the request to withdraw business areas and workplaces from Thai Airways International Public Company Limited, King Power Duty Free Company Limited and other operators. The AOT operator's business area will continue to be reclaimed, including some operational areas of government agencies including the Immigration Office, Customs and Revenue Department. And the operational areas of some government agencies, the AOT estimates a loss of income of 90 million baht per month, or about 1,000 million baht per year.

Mr. Keerati also discussed the business outlook After the Covid-19 situation cleared, travel continued to pick up. Also, the government has policy measures. Including measures to stimulate the economy from tourism for tourists from China, Kazakhstan, Republic of India and Taiwan. As a result, air traffic volumes at all 6 airports of AOT have returned to continuous expansion.

In FY 2024 (October 2023 – May 2024), it has recovered to pre-Covid-19 levels. There were a total of 81.05 million passengers, an 83.4% recovery compared to pre-Covid-19 2019, 48.95 million international passengers, an 85.8% recovery, and 32.09 million domestic passengers, an 80% recovery.

AOT estimates air traffic volume at the 6 airports in the next 5 years, or 2029, to be approximately 170 million passengers and approximately 1 million Airlines are expected to be, and in the next 10 years or by 2034, approximately 210 million passengers and approximately 1 million aircraft million flights.

“In the first 2 quarters of this year, from September 2022 – March 2023, AOT generated revenue of 33,942 million baht, a 71% increase compared to the same period last year at 19,825 million baht. The remaining 2 quarters could generate more total revenue than 2019, while the first 2 The profit in the quarters was 10,348 million baht as the airport uses this money to improve its capabilities and predicts that the remaining 2 quarters will continue to be profitable.”

As the airport development program moves into its 46th year, AOT continues to invest in expanding the airport area. and developing services to support passenger travel Initially, with an investment budget of 12,500 million baht, the investment plan for the construction project for the main passenger building expansion in the east, including the Suvarnabhumi Airport development project in the south, is expected to open for bids by November Page, 120,000 million baht in the detailed design phase.